Ratan Tata’s guide to investing in startups

How to become richer, by a certified billionaire

After stepping down as chairman of Tata Group in December 2012, the chairman emeritus of TATA Sons started building up his investment portfolio. As of the first week of January, the industrialist, part of the Prime Minister’s Council on Trade and Industry, has invested in over 20 startups including Snapdeal, Xiaomi, Urban Ladder etc.

Since it’s still early days here in the Indian startup ecosystem, you’re probably unsure of where to invest some of your hard-earned money. We suggest listening to a man who’s estimated net worth is about/over $1 billion.

The idea needs to excite you

“If a startup doesn’t excite me, then I really don’t need to make an investment in that company,”

It’s as simple as that. Invest in something that makes your spidey senses tingle. Don’t just do it to show your solidarity to the young and creative minds of India or just because everyone else is jumping on the bandwagon.

The founders need to be passionate

“Interacting with young people has always been a very worthwhile experience, and I’ve probably learnt a lot more from them than you believe.”

We’ve told you: first impressions count. Founders usually have 30 minutes to make a pitch to Ratan Tata. If the 78-year-old tycoon feels that the founders don’t seem passionate enough about their idea or “do not give him a great deal of comfort”, he doesn’t invest.

Don’t be put off by persistence

“One must not confuse ambition and aggression for bad values if they’re done with a value system in mind.”

It’s not necessarily a bad thing if you have founders calling or e-mailing you about their new venture on a regular basis. It’s the tenacious ones that make it big.